Bill Text: FL S1428 | 2010 | Regular Session | Introduced

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Bill Title: Operation of the Florida Lottery [CPSC]

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2010-04-30 - Died in Committee on Governmental Oversight and Accountability [S1428 Detail]

Download: Florida-2010-S1428-Introduced.html

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Florida Senate - 2010                                    SB 1428 
 
By Senator Smith 
29-00808-10                                           20101428__ 
1                        A bill to be entitled 
2         An act relating to operation of the Florida Lottery; 
3         amending s. 20.317, F.S.; clarifying provisions 
4         concerning regional offices; amending s. 24.101, F.S.; 
5         revising a reference; amending s. 24.102, F.S.; 
6         revising provisions relating to legislative intent to 
7         provide for the operation of the lottery under a 
8         management agreement; amending s. 24.103, F.S.; 
9         providing and revising definitions; amending s. 
10         24.104, F.S.; revising provisions concerning the 
11         purpose of the Department of the Lottery to permit 
12         contracting with a manager; amending s. 24.105, F.S.; 
13         revising provisions concerning the powers and duties 
14         of the department to allow for possible contracting 
15         with a manager; providing that specified provisions 
16         apply regardless of whether the department contracts 
17         with a manager; deleting obsolete provisions; amending 
18         s. 24.107, F.S.; revising provisions concerning 
19         advertising and promotion of lottery games to conform 
20         to the possibility of contracting with a manager; 
21         amending ss. 24.108 and 24.111, F.S.; revising 
22         provisions relating to security and contracts for 
23         goods or services to conform to the possibility of 
24         contracting with a manager; creating s. 24.1115, F.S.; 
25         providing for a management agreement under which the 
26         lottery may be operated; providing intent; providing 
27         definitions; limiting the duration of such an 
28         agreement; providing limits on the games that may be 
29         offered under such an agreement; providing for an 
30         initial payment to the department by a manager; 
31         providing for royalty payments by a manager; providing 
32         for collection of funds in excess of a specified 
33         baseline growth percentage to ensure that the manager 
34         does not earn excess revenue; providing requirements 
35         for the contents of a management agreement; requiring 
36         periodic investigations of the performance by a 
37         manager; providing for a request for qualifications 
38         process to select a manager; providing for the public 
39         records status of specified materials under existing 
40         exemptions; providing for negotiations between one or 
41         more offerors and the department; providing selection 
42         procedures; requiring a public hearing; providing for 
43         designation of a manager by the Governor; providing 
44         for status of debt offering by the manager; providing 
45         for a time period for challenges to designation of a 
46         manager; providing department powers; prohibiting the 
47         department from selling the authorization to manage 
48         the lottery; providing that there is no prohibition on 
49         additional legislative authorization of other forms of 
50         gambling; amending s. 24.112, F.S.; revising 
51         provisions concerning retailers of lottery tickets to 
52         conform to the possibility of contracting with a 
53         manager; amending s. 24.113, F.S.; providing that 
54         provisions concerning minority participation also 
55         apply if the lottery contracts with a manager; 
56         amending ss. 24.114, 24.115, 24.1153, 24.117, 24.118, 
57         and 24.120, F.S.; revising provisions relating to bank 
58         deposits and control of lottery transactions, payment 
59         of prizes, assignment of prizes payable in 
60         installments, penalties for unlawful sale of lottery 
61         tickets, breach of confidentiality, and unlawful 
62         representation, and financial matters to conform to 
63         the possibility of contracting with a manager; 
64         amending s. 24.121, F.S.; revising provisions relating 
65         to allocation of revenues and expenditure of funds for 
66         public education to conform to the possibility of 
67         contracting with a manager; providing for a minimum 
68         allocation of proceeds received under a management 
69         agreement to the Florida Bright Futures Scholarship 
70         Program; amending ss. 24.122, 24.123, and 24.124, 
71         F.S.; revising provisions relating to an exemption 
72         from taxation, state preemption, inapplicability of 
73         other laws, annual audit of financial records and 
74         reports, responsibility for ticket accuracy, and 
75         liability to conform to the possibility of contracting 
76         with a manager; providing an effective date. 
77 
78  Be It Enacted by the Legislature of the State of Florida: 
79 
80         Section 1. Subsection (3) of section 20.317, Florida 
81  Statutes, is amended to read: 
82         20.317 Department of the Lottery.—There is created a 
83  Department of the Lottery. 
84         (3) The headquarters of the department shall be located in 
85  Tallahassee. However, the department may establish such regional 
86  offices throughout the state as the secretary deems necessary to 
87  perform its duties concerning the efficient operation of the 
88  state lottery. 
89         Section 2. Section 24.101, Florida Statutes, is amended to 
90  read: 
91         24.101 Short title.—This chapter act may be cited as the 
92  “Florida Public Education Lottery Act.” 
93         Section 3. Section 24.102, Florida Statutes, is amended to 
94  read: 
95         24.102 Purpose and intent.— 
96         (1) The purpose of this chapter act is to implement s. 15, 
97  Art. X of the State Constitution in a manner that enables the 
98  people of the state to benefit from significant additional 
99  moneys for education and also enables the people of the state to 
100  play the best lottery games available. 
101         (2) The intent of the Legislature is: 
102         (a) That the net proceeds of lottery games conducted 
103  pursuant to this chapter act be used to support improvements in 
104  public education and that such proceeds not be used as a 
105  substitute for existing resources for public education. 
106         (b) That the lottery games be operated by a department of 
107  state government that functions as much as possible in the 
108  manner of an entrepreneurial business enterprise or with the 
109  assistance of an entrepreneurial business enterprise under a 
110  management agreement overseen by the department. The Legislature 
111  recognizes that the operation of a lottery is a unique activity 
112  for state government and that structures and procedures 
113  appropriate to the performance of other governmental functions 
114  are not necessarily appropriate to the operation of a state 
115  lottery. 
116         (c) That the lottery games be operated by a self 
117  supporting, revenue-producing department or with the assistance 
118  of an entrepreneurial business enterprise under a management 
119  agreement with government oversight. 
120         (d) That the department be accountable to the Legislature 
121  and the people of the state through a system of audits and 
122  reports and through compliance with financial disclosure, open 
123  meetings, and public records laws and that any entity contracted 
124  with under a management agreement must also be accountable to 
125  the Legislature and the people of the state. 
126         Section 4. Section 24.103, Florida Statutes, is renumbered 
127  and amended to read: 
128         24.103 Definitions.—As used in this chapter act: 
129         (1) “Department” means the Department of the Lottery. 
130         (7)(2) “Secretary” means the secretary of the department. 
131         (3) “Management agreement” means that agreement entered 
132  into pursuant to which the state may contract with a manager to 
133  provide management services to the lottery, although under such 
134  an agreement the department shall continue to manage and operate 
135  the lottery, and further pursuant to which the manager may 
136  receive a certain share of lottery ticket sales or related 
137  proceeds in consideration of the payment of a fee or fees to the 
138  state. 
139         (4) “Manager” means an entity that provides management 
140  services to the lottery on behalf of the department under a 
141  management agreement. 
142         (5)(3) “Person” means any individual, firm, association, 
143  joint adventure, partnership, estate, trust, syndicate, 
144  fiduciary, corporation, or other group or combination and shall 
145  include any agency or political subdivision of the state. 
146         (2)(4) “Major procurement” means a procurement for a 
147  contract for the printing of tickets for use in any lottery 
148  game, consultation services for the startup of the lottery, any 
149  goods or services involving the official recording for lottery 
150  game play purposes of a player’s selections in any lottery game 
151  involving player selections, any goods or services involving the 
152  receiving of a player’s selection directly from a player in any 
153  lottery game involving player selections, any goods or services 
154  involving the drawing, determination, or generation of winners 
155  in any lottery game, the security report services provided for 
156  in this chapter act, or any goods and services relating to 
157  marketing and promotion that which exceed a value of $25,000. 
158         (6)(5) “Retailer” means a person who sells lottery tickets 
159  on behalf of the department or the manager pursuant to a 
160  contract. 
161         (8)(6) “Vendor” means a person who provides or proposes to 
162  provide goods or services to the department, but does not 
163  include an employee of the department, a retailer, or a state 
164  agency. 
165         Section 5. Section 24.104, Florida Statutes, is amended to 
166  read: 
167         24.104 Department; purpose.—The purpose of the department 
168  is to operate the state lottery as authorized by s. 15, Art. X 
169  of the State Constitution with or without a manager so as to 
170  maximize revenues in a manner consonant with the dignity of the 
171  state and the welfare of its citizens. 
172         Section 6. Subsections (2), (4), (6), (7), (9), (11), (15), 
173  (17), (18), and (19) of section 24.105, Florida Statutes, are 
174  amended to read: 
175         24.105 Powers and duties of department.—The department 
176  shall: 
177         (2) Supervise and administer the operation of the lottery 
178  with or without a manager in accordance with the provisions of 
179  this chapter act and rules adopted pursuant thereto. 
180         (4) Submit monthly and annual reports to the Governor, the 
181  Chief Financial Officer, the President of the Senate, and the 
182  Speaker of the House of Representatives disclosing the total 
183  lottery revenues, prize disbursements, and other expenses of the 
184  department during the preceding month or, if the lottery has 
185  entered into a management agreement, comparable information 
186  provided by the manager. The annual report shall additionally 
187  describe the organizational structure of the department, 
188  including its hierarchical structure, and shall identify the 
189  divisions and bureaus created by the secretary and summarize the 
190  departmental functions performed by each. 
191         (6) Maintain weekly or more frequent records of lottery 
192  transactions, including the distribution of tickets to 
193  retailers, revenues received, claims for prizes, prizes paid, 
194  and other financial transactions of the department. If the 
195  department has entered into a management agreement, the 
196  agreement shall require the manager to maintain comparable 
197  information. 
198         (7) Make a continuing study of the lottery to ascertain any 
199  defects of this chapter act or rules adopted thereunder which 
200  could result in abuses in the administration of the lottery; 
201  make a continuing study of the operation and the administration 
202  of similar laws in other states and of federal laws that which 
203  may affect the lottery; and, if the department has not entered 
204  into a management agreement, make a continuing study of the 
205  reaction of the public to existing and potential features of the 
206  lottery. 
207         (9) Adopt rules governing the establishment and operation 
208  of the state lottery, including: 
209         (a)1. The type of lottery games to be conducted. 
210         2. Regardless of whether the department has entered into a 
211  management agreement, except that: 
212         a.1. No name of an elected official shall appear on the 
213  ticket or play slip of any lottery game or on any prize or on 
214  any instrument used for the payment of prizes, unless such prize 
215  is in the form of a state warrant. 
216         b.2. No coins or currency shall be dispensed from any 
217  electronic computer terminal or device used in any lottery game. 
218         c.3. Other than as provided in sub-subparagraph d. 
219  subparagraph 4., no terminal or device may be used for any 
220  lottery game that which may be operated solely by the player 
221  without the assistance of the retailer. 
222         d.4. The only player-activated machine that which may be 
223  utilized is a machine that which dispenses instant lottery game 
224  tickets following the insertion of a coin or currency by a 
225  ticket purchaser. To be authorized a machine must: be under the 
226  supervision and within the direct line of sight of the lottery 
227  retailer to ensure that the machine is monitored and only 
228  operated by persons at least 18 years of age and; be capable of 
229  being electronically deactivated by the retailer to prohibit use 
230  by persons less than 18 years of age through the use of a 
231  lockout device that maintains the machine’s deactivation for a 
232  period of no less than 5 minutes unless the machine uses a 
233  method of verifying the age of an operator that the department 
234  certifies is equivalent or superior to line-of-sight monitoring 
235  and lockout by the retailer. Such a machine must also; and be 
236  designed to prevent its use or conversion for use in any manner 
237  other than the dispensing of instant lottery tickets. Authorized 
238  machines may dispense change to players purchasing tickets but 
239  may not be utilized for paying the holders of winning tickets of 
240  any kind. At least one clerk must be on duty at the lottery 
241  retailer while the machine is in operation. However, at least 
242  two clerks must be on duty at any lottery location that which 
243  has violated s. 24.1055. 
244         (b) The sales price of tickets. 
245         (c) The number and sizes of prizes. 
246         (d) The method of selecting winning tickets. However, 
247  regardless of whether the department has entered into a 
248  management agreement, if a lottery game involves a drawing, the 
249  drawing shall be public and witnessed by an accountant employed 
250  by an independent certified public accounting firm. The 
251  equipment used in the drawing shall be inspected before and 
252  after the drawing. 
253         (e) The manner of payment of prizes to holders of winning 
254  tickets. 
255         (f) The frequency of drawings or selections of winning 
256  tickets. 
257         (g) The number and type of locations at which tickets may 
258  be purchased. 
259         (h) The method to be used in selling tickets. 
260         (i) The manner and amount of compensation of retailers. 
261         (j) Such other matters necessary or desirable for the 
262  efficient or economical operation of the lottery or for the 
263  convenience of the public. 
264         (11) In the selection of games and method of selecting 
265  winning tickets, be sensitive to the impact of the lottery upon 
266  the pari-mutuel industry and, accordingly, the department or the 
267  manager, if any, may use for any game the theme of horseracing, 
268  dogracing, or jai alai and may allow a lottery game to be based 
269  upon a horserace, dograce, or jai alai activity so long as the 
270  outcome of such lottery game is determined entirely by chance. 
271         (15) Or the manager, if any, shall have the authority to 
272  charge fees to persons applying for contracts as vendors or 
273  retailers, which fees are reasonably calculated to cover the 
274  costs of investigations and other activities related to the 
275  processing of the application. 
276         (17) Or the manager, if any, shall, in accordance with the 
277  provisions of this chapter act, enter into contracts with 
278  retailers so as to provide adequate and convenient availability 
279  of tickets to the public for each game. 
280         (18) Or the manager, if any, shall have the authority to 
281  enter into agreements with other states for the operation and 
282  promotion of a multistate lottery if such agreements are in the 
283  best interest of the state lottery. The authority conferred by 
284  this subsection is not effective until 1 year after the first 
285  day of lottery ticket sales. 
286         (19) Employ division directors and other staff as may be 
287  necessary to carry out the provisions of this chapter act; 
288  however: 
289         (a) No person shall be employed by the department who has 
290  been convicted of, or entered a plea of guilty or nolo 
291  contendere to, a felony committed in the preceding 10 years, 
292  regardless of adjudication, unless the department determines 
293  that: 
294         1. The person has been pardoned or his or her civil rights 
295  have been restored; or 
296         2. Subsequent to such conviction or entry of plea the 
297  person has engaged in the kind of law-abiding commerce and good 
298  citizenship that would reflect well upon the integrity of the 
299  lottery. 
300         (b) No officer or employee of the department having 
301  decisionmaking authority shall participate in any decision 
302  involving any vendor or retailer with whom the officer or 
303  employee has a financial interest. No such officer or employee 
304  may participate in any decision involving any vendor or retailer 
305  with whom the officer or employee has discussed employment 
306  opportunities without the approval of the secretary or, if such 
307  officer is the secretary, without the approval of the Governor. 
308  Any officer or employee of the department shall notify the 
309  secretary of any such discussion or, if such officer is the 
310  secretary, he or she shall notify the Governor. A violation of 
311  this paragraph is punishable in accordance with s. 112.317. 
312         (c) No officer or employee of the department who leaves the 
313  employ of the department shall represent any vendor or retailer 
314  or the manager, if any, before the department regarding any 
315  specific matter in which the officer or employee was involved 
316  while employed by the department, for a period of 1 year 
317  following cessation of employment with the department. A 
318  violation of this paragraph is punishable in accordance with s. 
319  112.317. 
320         (d) The department shall establish and maintain a personnel 
321  program for its employees, including a personnel classification 
322  and pay plan which may provide any or all of the benefits 
323  provided in the Senior Management Service or Selected Exempt 
324  Service. Each officer or employee of the department shall be a 
325  member of the Florida Retirement System. The retirement class of 
326  each officer or employee shall be the same as other persons 
327  performing comparable functions for other agencies. Employees of 
328  the department shall serve at the pleasure of the secretary and 
329  shall be subject to suspension, dismissal, reduction in pay, 
330  demotion, transfer, or other personnel action at the discretion 
331  of the secretary. Such personnel actions are exempt from the 
332  provisions of chapter 120. All employees of the department are 
333  exempt from the Career Service System provided in chapter 110 
334  and, notwithstanding the provisions of s. 110.205(5), are not 
335  included in either the Senior Management Service or the Selected 
336  Exempt Service. However, all employees of the department are 
337  subject to all standards of conduct adopted by rule for career 
338  service and senior management employees pursuant to chapter 110. 
339  In the event of a conflict between standards of conduct 
340  applicable to employees of the Department of the Lottery the 
341  more restrictive standard shall apply. Interpretations as to the 
342  more restrictive standard may be provided by the Commission on 
343  Ethics upon request of an advisory opinion pursuant to s. 
344  112.322(3)(a), for purposes of this subsection the opinion shall 
345  be considered final action. 
346         (e) If the department enters into a management agreement, 
347  no employee or contractor of the manager shall receive 
348  membership in the Florida Retirement System or any other state 
349  retirement or other state employee benefits on the basis of such 
350  employment or contract. 
351         Section 7. Section 24.107, Florida Statutes, is amended to 
352  read: 
353         24.107 Advertising and promotion of lottery games.— 
354         (1) The Legislature recognizes the need for extensive and 
355  effective advertising and promotion of lottery games. It is the 
356  intent of the Legislature that such advertising and promotion be 
357  consistent with the dignity and integrity of the state. In 
358  advertising the value of a prize that will be paid over a period 
359  of years, the department or the manager, if any, may refer to 
360  the sum of all prize payments over the period. 
361         (2) The department or the manager, if any, may act as a 
362  retailer and may conduct promotions that which involve the 
363  dispensing of lottery tickets free of charge. 
364         Section 8. Subsections (2), (5), and (7) of section 24.108, 
365  Florida Statutes, are amended to read: 
366         24.108 Division of Security; duties; security report.— 
367         (2) The director and all investigators employed by the 
368  division shall meet the requirements for employment and 
369  appointment provided by s. 943.13 and shall satisfy the 
370  requirements for certification established by the Criminal 
371  Justice Standards and Training Commission pursuant to chapter 
372  943. The director and such investigators shall be designated law 
373  enforcement officers and shall have the power to investigate and 
374  arrest for any alleged violation of this chapter act or any rule 
375  adopted pursuant thereto, or any law of this state. Such law 
376  enforcement officers may enter upon any premises in which 
377  lottery tickets are sold, manufactured, printed, or stored 
378  within the state for the performance of their lawful duties and 
379  may take with them any necessary equipment, and such entry shall 
380  not constitute a trespass. In any instance in which there is 
381  reason to believe that a violation has occurred, such officers 
382  have the authority, without warrant, to search and inspect any 
383  premises where the violation is alleged to have occurred or is 
384  occurring. Any such officer may, consistent with the United 
385  States and Florida Constitutions, seize or take possession of 
386  any papers, records, tickets, currency, or other items related 
387  to any alleged violation. 
388         (5) The Department of Law Enforcement shall provide 
389  assistance in obtaining criminal history information relevant to 
390  investigations required for honest, secure, and exemplary 
391  lottery operations, and such other assistance as may be 
392  requested by the secretary and agreed to by the executive 
393  director of the Department of Law Enforcement. Any other state 
394  agency, including the Department of Business and Professional 
395  Regulation and the Department of Revenue, shall, upon request, 
396  provide the Department of the Lottery with any information 
397  relevant to any investigation conducted pursuant to this chapter 
398  act. The Department of the Lottery shall maintain the 
399  confidentiality of any confidential information it receives from 
400  any other agency. The Department of the Lottery shall reimburse 
401  any agency for the actual cost of providing any assistance 
402  pursuant to this subsection. 
403         (7)(a) After the first full year of sales of tickets to the 
404  public, or sooner if the secretary deems necessary, The 
405  department shall, as it deems appropriate, but at least once 
406  every 2 years engage an independent firm experienced in security 
407  procedures, including, but not limited to, computer security and 
408  systems security, to conduct a comprehensive study and 
409  evaluation of all aspects of security in the operation of the 
410  department. 
411         (b) The portion of the security report containing the 
412  overall evaluation of the department in terms of each aspect of 
413  security shall be presented to the Governor, the President of 
414  the Senate, and the Speaker of the House of Representatives. The 
415  portion of the security report containing specific 
416  recommendations shall be confidential and shall be presented 
417  only to the secretary, the Governor, and the Auditor General; 
418  however, upon certification that such information is necessary 
419  for the purpose of effecting legislative changes, such 
420  information shall be disclosed to the President of the Senate 
421  and the Speaker of the House of Representatives, who may 
422  disclose such information to members of the Legislature and 
423  legislative staff as necessary to effect such purpose. However, 
424  any person who receives a copy of such information or other 
425  information that which is confidential pursuant to this chapter 
426  act or rule of the department shall maintain its 
427  confidentiality. The confidential portion of the report is 
428  exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I 
429  of the State Constitution. 
430         (c) Thereafter, similar studies of security shall be 
431  conducted as the department deems appropriate but at least once 
432  every 2 years. 
433         Section 9. Subsection (1) section 24.111, Florida Statutes, 
434  is amended to read: 
435         24.111 Vendors; disclosure and contract requirements.— 
436         (1) The department may enter into contracts for the 
437  purchase, lease, or lease-purchase of such goods or services as 
438  are necessary for effectuating the purposes of this chapter act. 
439  The department may not contract with any person or entity for 
440  the total operation and administration of the state lottery 
441  established by this chapter as provided in s. 24.1115 or act but 
442  may make procurements that which integrate functions such as 
443  lottery game design, supply of goods and services, and 
444  advertising. In all procurement decisions, the department shall 
445  take into account the particularly sensitive nature of the state 
446  lottery and shall consider the competence, quality of product, 
447  experience, and timely performance of the vendors in order to 
448  promote and ensure security, honesty, fairness, and integrity in 
449  the operation and administration of the lottery and the 
450  objective of raising net revenues for the benefit of the public 
451  purpose described in this chapter act. 
452         Section 10. Section 24.1115, Florida Statutes, is created 
453  to read: 
454         24.1115 Management agreement.— 
455         (1) In construing this section, it is the intent of the 
456  Legislature that the manager be accountable to the Legislature 
457  and the people of this state through a system of audits and 
458  reports and by complying with the financial disclosure 
459  requirements of this section. The powers conferred by this 
460  section are in addition and supplemental to the powers conferred 
461  by any other law. If any other law or rule is inconsistent with 
462  this section, this section is controlling as to any management 
463  agreement entered into under this section. 
464         (2) As used in this section, the term: 
465         (a) “Offeror” means a person or group of persons that 
466  responds to a request for qualifications under this section. 
467         (b) “Request for qualifications” means all materials and 
468  documents prepared by the department to solicit the following 
469  from offerors: 
470         1. Statements of qualifications. 
471         2. Proposals to enter into a management agreement. 
472         (c) “Selected offer” means the final offer of an offeror 
473  that is the preliminary selection to be the manager for the 
474  lottery under subsection (12). 
475         (3)(a) This section contains full and complete authority 
476  for a management agreement between the department and a manager 
477  and any rules adopted thereunder. No law, procedure, proceeding, 
478  publication, notice, consent, approval, order, or act by the 
479  department or any other officer, department, agency, or 
480  instrumentality of the state or any political subdivision is 
481  required for the department to enter into a management agreement 
482  under this section. 
483         (b) This section contains full and complete authority for 
484  the department to approve any subcontracts entered into by a 
485  manager under the terms of a management agreement. 
486         (4) Subject to the other provisions of this section, the 
487  department may enter into a management agreement with a manager 
488  for a term not to exceed 30 years. 
489         (5) The department may not enter into a management 
490  agreement that authorizes a manager to operate any of the 
491  following games or a game simulating any of the following games: 
492         (a) Video lottery games. 
493         (b) Pari-mutuel wagering on any form of racing. 
494         (c) A game in which winners are selected on the results of 
495  a race or sporting event. 
496         (d) Any other game commonly considered to be a form of 
497  gambling that is not a game or a variation of a game that the 
498  department operated before the management agreement is executed 
499  or is operating on the date the management agreement is 
500  executed. 
501         (6)(a) The management agreement must establish a 
502  substantial benchmark amount. The management agreement must 
503  require the manager to make an initial payment to the department 
504  on the effective date of the management agreement in an amount 
505  that exceeds the benchmark amount established in the management 
506  agreement. 
507         (b) The initial payment required under paragraph (a) shall 
508  be deposited as provided in s. 24.121. 
509         (c) If the manager fails to make any payment under this 
510  section by the due date of the payment, the management agreement 
511  is terminated. 
512         (7)(a) The management agreement must require that all 
513  lottery proceeds initially be directly deposited with the state. 
514  The state shall provide sums due to the manager under the 
515  agreement only after all of the manager’s obligations to the 
516  state have been satisfied. 
517         (b) The state shall retain an annual amount at least equal 
518  to the lottery proceeds for the last fiscal year preceding the 
519  agreement beginning on a date specified in the management 
520  agreement and occurring during the first year after the 
521  execution of the management agreement. For the purposes of this 
522  subsection, such annual amount shall be referred to as the 
523  “state annuity.” The state annuity received under this 
524  subsection shall be deposited as provided in s. 24.121. 
525         (c) The management agreement must include the following 
526  provisions to ensure that the manager does not earn excess 
527  revenue under the management agreement: 
528         1. The Office of Policy and Budget in the Executive Office 
529  of the Governor shall calculate the percentage rate of average 
530  annual growth in gross revenue earned by the department during 
531  the last 5 full state fiscal years preceding the commencement of 
532  the management agreement. For purposes of this subsection, this 
533  percentage is referred to as the “baseline growth percentage.“ 
534         2. Beginning with the second full state fiscal year after 
535  the execution of the management agreement, the Office of Policy 
536  and Budget in the Executive Office of the Governor shall for 
537  each state fiscal year calculate the growth, expressed as a 
538  percentage, in gross revenue earned by the manager under the 
539  management agreement, as compared to the preceding state fiscal 
540  year. 
541         3. The department shall establish an excess payments 
542  account for purposes of this paragraph. Any earnings from money 
543  in the excess payments account accrue to the account. Money in 
544  the excess payments account may be used only to make payments to 
545  a manager as required by this paragraph and to receive payments 
546  from a manager as required by this paragraph. 
547         4. If the percentage calculated by the Office of Policy and 
548  Budget in the Executive Office of the Governor under 
549  subparagraph 2. for a particular state fiscal year exceeds the 
550  baseline growth percentage, the manager must make an additional 
551  payment to the department. The amount of the additional payment 
552  for the state fiscal year is equal to the gross revenue earned 
553  by the manager from lottery tickets in the state fiscal year 
554  multiplied by one-half the difference between the percentage 
555  calculated by the Office of Policy and Budget in the Executive 
556  Office of the Governor under subparagraph 2. for the state 
557  fiscal year and the baseline growth percentage. The department 
558  shall deposit any additional payment made by the manager under 
559  this subparagraph into the excess payments account. 
560         5. If the baseline growth percentage exceeds the percentage 
561  calculated by the Office of Policy and Budget in the Executive 
562  Office of the Governor under subparagraph 2. for a particular 
563  state fiscal year, the department must make a payment to the 
564  manager from the excess payments account. However, the 
565  department is required to make a payment to the manager only if 
566  the excess payments account has a positive balance. The amount 
567  of the payment by the department for the state fiscal year is 
568  equal to the lesser of: 
569         a. The result of the gross revenue earned by the manager 
570  from lottery tickets in the state fiscal year multiplied by one 
571  half the difference between the baseline growth percentage and 
572  the percentage calculated by the Office of Policy and Budget in 
573  the Executive Office of the Governor under subparagraph 2. for 
574  the state fiscal year; or 
575         b. The balance in the excess payments account. 
576         6. The management agreement must specify the time by which 
577  a payment required under this paragraph shall be made. 
578         7. If at the expiration or termination of the management 
579  agreement there is money remaining in the excess payments 
580  account, it shall be retained by the department and deposited as 
581  provided in s. 24.121. 
582         (8) A management agreement must contain the following: 
583         (a) The original term of the management agreement. 
584         (b) A requirement that the manager locate its principal 
585  office within this state. 
586         (c) So long as the manager complies with all the conditions 
587  of the agreement under the oversight of the department, the 
588  manager shall perform its duties and obligations with respect to 
589  management of the operation of the lottery, including the 
590  following: 
591         1. The right to use, or ownership of, equipment and other 
592  assets used in the operation of the lottery. 
593         2. The rights and obligations under contracts with 
594  retailers and vendors. 
595         3. The implementation of a comprehensive security program 
596  by the manager. 
597         4. The implementation of a comprehensive system of internal 
598  audits. 
599         5. The implementation of a program by the manager to curb 
600  compulsive gambling by persons playing the lottery. 
601         6. A system for determining the following: 
602         a. The type of lottery games to be conducted. 
603         b. The method of selecting winning tickets. 
604         c. The manner of payment of prizes to holders of winning 
605  tickets. 
606         d. The frequency of drawings of winning tickets. 
607         e. The method to be used in selling tickets. 
608         f. A system for verifying the validity of tickets claimed 
609  to be winning tickets. 
610         g. The basis upon which retailer commissions are 
611  established by the manager. 
612         h. Minimum payouts. 
613         7. A requirement that advertising and promotion must be 
614  consistent with the dignity and integrity of the state. 
615         (d) Guidelines to ensure that advertising and promoting of 
616  the lottery by the manager are not misleading and fairly balance 
617  the potential benefits and the potential costs and risks of 
618  playing lottery games. 
619         (e) A code of ethics for the manager’s officers and 
620  employees. 
621         (f) A requirement that the department monitor the manager’s 
622  practices and take action that the department considers 
623  appropriate to ensure that the manager is in compliance with the 
624  terms of the management agreement, while allowing the manager, 
625  unless specifically prohibited by law or the management 
626  agreement, to negotiate and sign its own contracts with vendors. 
627         (g) A provision requiring the manager to periodically file 
628  appropriate financial statements in a form and manner acceptable 
629  to the department. 
630         (h) Cash reserve requirements. 
631         (i) Procedural requirements for obtaining approval by the 
632  department when a management agreement or an interest in a 
633  management agreement is sold, assigned, transferred, or pledged 
634  as collateral to secure financing. A management agreement or an 
635  interest in a management agreement may not be sold, assigned, 
636  transferred, or pledged as collateral to secure financing 
637  without the approval of the department. 
638         (j) Grounds for termination of the management agreement by 
639  the department or the manager. 
640         (k) Procedures for amendment of the agreement. 
641         (l) A provision prohibiting the department from entering 
642  into another management agreement under this section as long as 
643  the original management agreement has not been terminated. 
644         (m) The transition of rights and obligations, including any 
645  associated equipment or other assets used in the operation of 
646  the lottery, from the manager to any successor manager of the 
647  lottery, including the department, following the termination of 
648  or foreclosure upon the management agreement. 
649         (n) Ownership of all copyrights, trademarks, and service 
650  marks by the department in the name of the state and that any 
651  use of them by the manager shall only be for the purpose of 
652  fulfilling its obligations under the management agreement during 
653  the term of the agreement. 
654         (o) Minority participation as provided in s. 24.113. 
655         (9)(a) The manager shall undergo a complete investigation 
656  every 3 years by the department to determine whether the manager 
657  remains in compliance with this chapter and the management 
658  agreement. 
659         (b) The manager shall bear the cost of an investigation or 
660  reinvestigation of the manager under this subsection. 
661         (10)(a) Before the department enters into a management 
662  agreement pursuant to this section, the secretary, as provided 
663  in subsection (17), may retain an advisor or advisors to assess 
664  the fiscal feasibility of such an agreement and help determine 
665  whether to proceed. Such an advisor may also be retained by the 
666  department to represent the department in the request for 
667  qualifications process, if one is commenced. If the secretary 
668  decides to pursue the possibility of a management agreement, a 
669  request for qualifications must be issued as set forth in this 
670  section. A request for qualifications for a management agreement 
671  may be issued in one or more phases. 
672         (b) A request for qualifications must include the 
673  following: 
674         1. The factors or criteria that will be used in evaluating 
675  an offeror’s statement of qualifications and proposal. 
676         2. A statement that a proposal must be accompanied by 
677  evidence of the offeror’s financial responsibility. 
678         3. A statement concerning whether discussions may be 
679  conducted with the offerors for the purpose of clarification to 
680  ensure full understanding of and responsiveness to the 
681  solicitation requirements. 
682         4. A statement concerning any other information to be 
683  considered in evaluating the offeror’s qualifications and 
684  proposal. 
685         (c) Notice of a request for qualifications shall be 
686  published twice at least 7 calendar days apart, with the second 
687  publication made at least 7 days before any initial submission 
688  is due. 
689         (d) As provided in a request for qualifications, 
690  discussions may be conducted with the offerors for the purpose 
691  of clarification to ensure full understanding of and 
692  responsiveness to the solicitation requirements. 
693         (11) The contents of proposals are competitive sealed 
694  replies in response to an invitation to negotiate for purposes 
695  of s. 119.071(1)(b) and are exempt from s. 119.07(1) and s. 
696  24(a), Art. I of the State Constitution until disclosure of the 
697  contents that are not otherwise exempt under s. 119.071 or other 
698  law is required under s. 119.071(1)(b). 
699         (12)(a) The department may negotiate with one or more 
700  offerors the department determines are responsible and 
701  reasonably capable of managing the lottery and may seek to 
702  obtain a final offer from one or more of those offerors. 
703         (b) The department shall consider the statement of 
704  qualifications and the proposals to enter into a management 
705  agreement that are submitted in response to a request for 
706  qualifications in making a determination under this section, 
707  including the following as they apply to the offeror and its 
708  partners, if any: 
709         1. Expertise, qualifications, competence, skills, and plan 
710  to perform obligations under the management agreement in 
711  accordance with the management agreement. 
712         2. Financial strength, including capitalization and 
713  available financial resources. 
714         3. Experience in operating government-authorized lotteries 
715  and gaming and other similar projects and the quality of any 
716  past or present performance on similar or equivalent 
717  engagements. 
718         4. Integrity, background, and reputation. 
719         (c) The requirements set forth in paragraph (b) also apply 
720  to the approval of any successor manager. 
721         (13)(a) After the final offers from offerors have been 
722  negotiated under subsection (12), the department shall: 
723         1. Make a preliminary selection of an offeror as the 
724  manager for the lottery; or 
725         2. Terminate the request for qualifications process. 
726         (b) If the department makes a preliminary selection of the 
727  manager under this subsection, the department shall schedule a 
728  public hearing on the preliminary selection and provide public 
729  notice of the hearing at least 7 days before the hearing. The 
730  notice must include the following: 
731         1. The date, time, and place of the hearing. 
732         2. The subject matter of the hearing. 
733         3. A brief description of the management agreement to be 
734  awarded. 
735         4. The identity of the offeror that has been preliminarily 
736  selected as the manager. 
737         5. The address and telephone number of the department. 
738         6. A statement indicating that, subject to subsection (11), 
739  and except for those parts that are confidential under s. 
740  119.071 or other applicable law, the selected offer and an 
741  explanation of the basis upon which the preliminary selection 
742  was made are available for public inspection and copying at the 
743  principal office of the department during regular business hours 
744  and, to the extent feasible, on the Internet. 
745         (c) Subject to subsection (11), and except for those parts 
746  that are confidential under s. 119.071 or other applicable law, 
747  the selected offer and a written explanation of the basis upon 
748  which the preliminary selection was made shall be made available 
749  for inspection and copying in accordance with s. 119.07 and, to 
750  the extent feasible, on the Internet at least 7 calendar days 
751  before the hearing scheduled under this section. 
752         (d) At the hearing, the department shall allow the public 
753  to be heard on the preliminary selection. 
754         (14)(a) After the hearing required under subsection (13), 
755  the department shall determine if a management agreement should 
756  be entered into with the offeror that submitted the selected 
757  offer. If the department makes a favorable determination, the 
758  department shall submit the determination to the Governor. 
759         (b) After review of the department’s determination, the 
760  Governor may accept or reject the department’s determination. If 
761  the Governor accepts the department’s determination, the 
762  Governor shall designate the offeror who submitted the selected 
763  offer as the manager for the lottery. 
764         (c) After the Governor designates the manager, the 
765  department may execute a management agreement with the 
766  designated manager. 
767         (15) The manager may finance its obligations with respect 
768  to the lottery and the management agreement in the amounts and 
769  upon the terms and conditions determined by the manager. 
770  However, any bonds, debt, other securities, or other financing 
771  issued for the purposes of this section shall not be considered 
772  to constitute a debt of the state or any political subdivision 
773  of the state or a pledge of the faith and credit of the state or 
774  any political subdivision of the state. 
775         (16) An action to contest the validity of a management 
776  agreement entered into under this section may not be brought 
777  after the 15th day after the publication of the notice of the 
778  designation of the manager under the management agreement as 
779  provided in subsection (14). 
780         (17)(a) The department must use appropriate experts and 
781  professionals needed to conduct a competitive bidding proceeding 
782  as required under this section and may use the services of 
783  outside professionals to the extent necessary to carry out its 
784  obligations under this section. 
785         (b) The department may exercise any powers provided under 
786  this section in participation or cooperation with any other 
787  governmental entity and enter into any contracts to facilitate 
788  that participation or cooperation without compliance with any 
789  other statute. 
790         (c) The department may make and enter into all contracts 
791  and agreements necessary or incidental to the performance of the 
792  department’s duties under this section and the execution of the 
793  department’s powers under this section. These contracts or 
794  agreements are not subject to any approval by any other 
795  governmental entity and may be for any term of years within the 
796  time period of the management agreement under subsection (4) and 
797  contain any terms that are considered reasonable by the 
798  department. 
799         (d) The department may make and enter into all contracts 
800  and agreements with a state agency necessary or incidental to 
801  the performance of the duties and the execution of the powers 
802  granted to the department or the state agency in accordance with 
803  this section or the management agreement. These contracts or 
804  agreements are not subject to approval by any other governmental 
805  entity and may be for any term of years and contain any terms 
806  that are considered reasonable by the department or the state 
807  agency. 
808         (18)(a) The department may not sell the authorization to 
809  operate the lottery. 
810         (b) Any tangible personal property used exclusively in 
811  connection with the lottery that is owned by the department and 
812  leased to the manager shall be owned by the department in the 
813  name of the state and shall be considered to be public property 
814  devoted to an essential public and governmental function. 
815         (19) The department may exercise any of its powers under 
816  this chapter or any other law as necessary or desirable for the 
817  execution of the department’s powers under this section. 
818         (20) Neither this section nor any management agreement 
819  entered into under this section prohibits the Legislature from 
820  authorizing forms of gambling that are not in direct competition 
821  with the lottery. 
822         Section 11. Section 24.112, Florida Statutes, is amended to 
823  read: 
824         24.112 Retailers of lottery tickets.— 
825         (1) If the department does not enter into a management 
826  agreement, the department shall adopt promulgate rules 
827  specifying the terms and conditions for contracting with 
828  retailers who will best serve the public interest and promote 
829  the sale of lottery tickets. 
830         (2) If the department does not enter into a management 
831  agreement, in the selection of retailers, the department shall 
832  consider factors such as financial responsibility, integrity, 
833  reputation, accessibility of the place of business or activity 
834  to the public, security of the premises, the sufficiency of 
835  existing retailers to serve the public convenience, and the 
836  projected volume of the sales for the lottery game involved. In 
837  the consideration of these factors, the department may require 
838  the information it deems necessary of any person applying for 
839  authority to act as a retailer. However, the department may not 
840  establish a limitation upon the number of retailers and shall 
841  make every effort to allow small business participation as 
842  retailers. It is the intent of the Legislature that retailer 
843  selections be based on business considerations and the public 
844  convenience and that retailers be selected without regard to 
845  political affiliation. 
846         (3) If the department does not enter into a management 
847  agreement, the department may shall not contract with any person 
848  as a retailer who: 
849         (a) Is less than 18 years of age. 
850         (b) Is engaged exclusively in the business of selling 
851  lottery tickets; however, this paragraph shall not preclude the 
852  department from selling lottery tickets. 
853         (c) Has been convicted of, or entered a plea of guilty or 
854  nolo contendere to, a felony committed in the preceding 10 
855  years, regardless of adjudication, unless the department 
856  determines that: 
857         1. The person has been pardoned or the person’s civil 
858  rights have been restored; 
859         2. Subsequent to such conviction or entry of plea the 
860  person has engaged in the kind of law-abiding commerce and good 
861  citizenship that would reflect well upon the integrity of the 
862  lottery; or 
863         3. If the person is a firm, association, partnership, 
864  trust, corporation, or other entity, the person has terminated 
865  its relationship with the individual whose actions directly 
866  contributed to the person’s conviction or entry of plea. 
867         (4) If the department does not enter into a management 
868  agreement, the department shall issue a certificate of authority 
869  to each person with whom it contracts as a retailer for purposes 
870  of display pursuant to subsection (6). The issuance of the 
871  certificate does shall not confer upon the retailer any right 
872  apart from that specifically granted in the contract. The 
873  authority to act as a retailer is shall not be assignable or 
874  transferable. 
875         (5) Any contract executed by the department under pursuant 
876  to this section shall specify the reasons for any suspension or 
877  termination of the contract by the department, including, but 
878  not limited to: 
879         (a) Commission of a violation of this chapter act or rule 
880  adopted pursuant thereto. 
881         (b) Failure to accurately account for lottery tickets, 
882  revenues, or prizes as required by the department. 
883         (c) Commission of any fraud, deceit, or misrepresentation. 
884         (d) Insufficient sale of tickets. 
885         (e) Conduct prejudicial to public confidence in the 
886  lottery. 
887         (f) Any material change in any matter considered by the 
888  department in executing the contract with the retailer. 
889         (6) Every retailer shall post and keep conspicuously 
890  displayed in a location on the premises accessible to the public 
891  its certificate of authority and, with respect to each game, a 
892  statement supplied by the department or the manager of the 
893  estimated odds of winning some prize for the game. 
894         (7) No contract with a retailer shall authorize the sale of 
895  lottery tickets at more than one location, and a retailer may 
896  sell lottery tickets only at the location stated on the 
897  certificate of authority. 
898         (8) If the department does not enter into a management 
899  agreement, with respect to any retailer whose rental payments 
900  for premises are contractually computed, in whole or in part, on 
901  the basis of a percentage of retail sales, and where such 
902  computation of retail sales is not explicitly defined to include 
903  sales of tickets in a state-operated lottery, the compensation 
904  received by the retailer from the department shall be deemed to 
905  be the amount of the retail sale for the purposes of such 
906  contractual compensation. 
907         (9) If the department does not enter into a management 
908  agreement: 
909         (a) The department may require every retailer to post an 
910  appropriate bond as determined by the department, using an 
911  insurance company acceptable to the department, in an amount not 
912  to exceed twice the average lottery ticket sales of the retailer 
913  for the period within which the retailer is required to remit 
914  lottery funds to the department. For the first 90 days of sales 
915  of a new retailer, the amount of the bond may not exceed twice 
916  the average estimated lottery ticket sales for the period within 
917  which the retailer is required to remit lottery funds to the 
918  department. This paragraph does shall not apply to lottery 
919  tickets that which are prepaid by the retailer. 
920         (b) In lieu of such bond, the department may purchase 
921  blanket bonds covering all or selected retailers or may allow a 
922  retailer to deposit and maintain with the Chief Financial 
923  Officer securities that are interest bearing or accruing and 
924  that, with the exception of those specified in subparagraphs 1. 
925  and 2., are rated in one of the four highest classifications by 
926  an established nationally recognized investment rating service. 
927  Securities eligible under this paragraph shall be limited to: 
928         1. Certificates of deposit issued by solvent banks or 
929  savings associations organized and existing under the laws of 
930  this state or under the laws of the United States and having 
931  their principal place of business in this state. 
932         2. United States bonds, notes, and bills for which the full 
933  faith and credit of the government of the United States is 
934  pledged for the payment of principal and interest. 
935         3. General obligation bonds and notes of any political 
936  subdivision of the state. 
937         4. Corporate bonds of any corporation that is not an 
938  affiliate or subsidiary of the depositor. 
939 
940  Such securities shall be held in trust and shall have at all 
941  times a market value at least equal to an amount required by the 
942  department. 
943         (10) Every contract entered into by the department pursuant 
944  to this section shall contain a provision for payment of 
945  liquidated damages to the department for any breach of contract 
946  by the retailer. 
947         (11) The department shall establish procedures by which 
948  each retailer shall account for all tickets sold by the retailer 
949  and account for all funds received by the retailer from such 
950  sales. The contract with each retailer shall include provisions 
951  relating to the sale of tickets, payment of moneys to the 
952  department, reports, service charges, and interest and 
953  penalties, if necessary, as the department shall deem 
954  appropriate. 
955         (12) No payment by a retailer to the department for tickets 
956  shall be in cash. All such payments shall be in the form of a 
957  check, bank draft, electronic fund transfer, or other financial 
958  instrument authorized by the secretary. 
959         (13) Each retailer shall provide accessibility for disabled 
960  persons on habitable grade levels. This subsection does not 
961  apply to a retail location that which has an entrance door 
962  threshold more than 12 inches above ground level. As used herein 
963  and for purposes of this subsection only, the term 
964  “accessibility for disabled persons on habitable grade levels” 
965  means that retailers shall provide ramps, platforms, aisles and 
966  pathway widths, turnaround areas, and parking spaces to the 
967  extent these are required for the retailer’s premises by the 
968  particular jurisdiction where the retailer is located. 
969  Accessibility shall be required to only one point of sale of 
970  lottery tickets for each lottery retailer location. The 
971  requirements of this subsection shall be deemed to have been met 
972  if, in lieu of the foregoing, disabled persons can purchase 
973  tickets from the retail location by means of a drive-up window, 
974  provided the hours of access at the drive-up window are not less 
975  than those provided at any other entrance at that lottery 
976  retailer location. Inspections for compliance with this 
977  subsection shall be performed by those enforcement authorities 
978  responsible for enforcement pursuant to s. 553.80 in accordance 
979  with procedures established by those authorities. Those 
980  enforcement authorities shall provide to the Department of the 
981  Lottery a certification of noncompliance for any lottery 
982  retailer not meeting such requirements. 
983         (14) The secretary may, after filing with the Department of 
984  State his or her manual signature certified by the secretary 
985  under oath, execute or cause to be executed contracts between 
986  the department and retailers by means of engraving, imprinting, 
987  stamping, or other facsimile signature. 
988         Section 12. Section 24.113, Florida Statutes, is amended to 
989  read: 
990         24.113 Minority participation.— 
991         (1) It is the intent of the Legislature that the department 
992  or the manager, if any, encourage participation by minority 
993  business enterprises as defined in s. 288.703. Accordingly, 15 
994  percent of the retailers shall be minority business enterprises 
995  as defined in s. 288.703(2); however, no more than 35 percent of 
996  such retailers shall be owned by the same type of minority 
997  person, as defined in s. 288.703(3). The department or the 
998  manager, if any, is encouraged to meet the minority business 
999  enterprise procurement goals set forth in s. 287.09451 in the 
1000  procurement of commodities, contractual services, construction, 
1001  and architectural and engineering services. This section shall 
1002  not preclude or prohibit a minority person from competing for 
1003  any other retailing or vending agreement awarded by the 
1004  department or the manager. 
1005         (2) The department or the manager, if any, shall is 
1006  directed to undertake training programs and other educational 
1007  activities to enable minority persons to compete for such 
1008  contracts on an equal basis. 
1009         Section 13. Section 24.114, Florida Statutes, is amended to 
1010  read: 
1011         24.114 Bank deposits and control of lottery transactions.— 
1012         (1) All moneys received by each retailer from the operation 
1013  of the state lottery, including, but not limited to, all ticket 
1014  sales, interest, gifts, and donations, less the amount retained 
1015  as compensation for the sale of the tickets and the amount paid 
1016  out as prizes, shall be remitted to the department or deposited 
1017  in a qualified public depository, as defined in s. 280.02, as 
1018  directed by the department. The department shall have the 
1019  responsibility for all administrative functions related to the 
1020  receipt of funds. The department may also require each retailer 
1021  to file with the department reports of the retailer’s receipts 
1022  and transactions in the sale of lottery tickets in such form and 
1023  containing such information as the department may require. The 
1024  department may require any person, including a qualified public 
1025  depository, to perform any function, activity, or service in 
1026  connection with the operation of the lottery as it may deem 
1027  advisable pursuant to this chapter act and rules of the 
1028  department, and such functions, activities, or services shall 
1029  constitute lawful functions, activities, and services of such 
1030  person. 
1031         (2) The department may require retailers to establish 
1032  separate electronic funds transfer accounts for the purpose of 
1033  receiving moneys from ticket sales, making payments to the 
1034  department, and receiving payments from the department. 
1035         (3) Each retailer is liable to the department for any and 
1036  all tickets accepted or generated by any employee or 
1037  representative of that retailer, and the tickets shall be deemed 
1038  to have been purchased by the retailer unless returned to the 
1039  department within the time and in the manner prescribed by the 
1040  department. All moneys received by retailers from the sale of 
1041  lottery tickets, less the amount retained as compensation for 
1042  the sale of tickets and the amount paid out as prizes by the 
1043  retailer, shall be held in trust prior to delivery to the 
1044  department or electronic transfer to the Operating Trust Fund. 
1045         Section 14. Section 24.115, Florida Statutes, is amended to 
1046  read: 
1047         24.115 Payment of prizes.— 
1048         (1) The department shall promulgate rules to establish a 
1049  system of verifying the validity of tickets claimed to win 
1050  prizes and to effect payment of such prizes; however, the 
1051  following shall apply whether the department does or does not 
1052  enter into a management agreement: 
1053         (a) The right of any person to a prize, other than a prize 
1054  that is payable in installments over time, is not assignable. 
1055  However, any prize, to the extent that it has not been assigned 
1056  or encumbered pursuant to s. 24.1153, may be paid to the estate 
1057  of a deceased prize winner or to a person designated pursuant to 
1058  an appropriate court order. A prize that is payable in 
1059  installments over time is assignable, but only pursuant to an 
1060  appropriate court order as provided in s. 24.1153. 
1061         (b) No prize shall be paid to any person under the age of 
1062  18 years unless the winning ticket was lawfully purchased and 
1063  made a gift to the minor. In such case, the department or the 
1064  manager, if a management agreement is in force, shall direct 
1065  payment to an adult member of the minor’s family or the legal 
1066  guardian of the minor as custodian for the minor. The person 
1067  named as custodian shall have the same powers and duties as 
1068  prescribed for a custodian pursuant to chapter 710, the Florida 
1069  Uniform Transfers to Minors Act. 
1070         (c) No prize may be paid arising from claimed tickets that 
1071  are stolen, counterfeit, altered, fraudulent, unissued, produced 
1072  or issued in error, unreadable, not received or not recorded by 
1073  the department or the manager, if a management agreement is in 
1074  force, by applicable deadlines, lacking in captions that confirm 
1075  and agree with the lottery play symbols as appropriate to the 
1076  lottery game involved, or not in compliance with such additional 
1077  specific rules and public or confidential validation and 
1078  security tests of the department or the manager, if a management 
1079  agreement is in force, appropriate to the particular lottery 
1080  game involved. 
1081         (d) No particular prize in any lottery game may be paid 
1082  more than once, and in the event of a binding determination that 
1083  more than one claimant is entitled to a particular prize, the 
1084  sole remedy of such claimants is the award to each of them of an 
1085  equal share in the prize. 
1086         (e) For the convenience of the public, retailers may be 
1087  authorized to pay winners amounts less than $600 after 
1088  performing validation procedures on their premises appropriate 
1089  to the lottery game involved. 
1090         (f) Holders of tickets shall have the right to claim prizes 
1091  for 180 days after the drawing or the end of the lottery game or 
1092  play in which the prize was won; except that with respect to any 
1093  game in which the player may determine instantly if he or she 
1094  has won or lost, such right shall exist for 60 days after the 
1095  end of the lottery game. If a valid claim is not made for a 
1096  prize within the applicable period, the prize shall constitute 
1097  an unclaimed prize for purposes of subsection (2). 
1098         (g) No prize shall be paid upon a ticket purchased or sold 
1099  in violation of this chapter act or to any person who is 
1100  prohibited from purchasing a lottery ticket pursuant to this 
1101  chapter act. Any such prize shall constitute an unclaimed prize 
1102  for purposes of subsection (2). 
1103         (2)(a) Eighty percent of all unclaimed prize money shall be 
1104  deposited in the Educational Enhancement Trust Fund consistent 
1105  with the provisions of s. 24.121(2). Subject to appropriations 
1106  provided in the General Appropriations Act, these funds may be 
1107  used to match private contributions received under the 
1108  postsecondary matching grant programs established in ss. 
1109  1011.32, 1011.85, 1011.94, and 1013.79. 
1110         (b) The remaining 20 percent of unclaimed prize money shall 
1111  be added to the pool from which future prizes are to be awarded 
1112  or used for special prize promotions. 
1113         (3) The department or the manager, if a management 
1114  agreement is in force, shall be discharged of all liability upon 
1115  payment of a prize. 
1116         (4) It is the responsibility of the appropriate state 
1117  agency and of the judicial branch to identify to the department 
1118  or the manager, if a management agreement is in force, in the 
1119  form and format prescribed by the department or the manager, 
1120  persons owing an outstanding debt to any state agency or owing 
1121  child support collected through a court, including spousal 
1122  support or alimony for the spouse or former spouse of the 
1123  obligor if the child support obligation is being enforced by the 
1124  Department of Revenue. Prior to the payment of a prize of $600 
1125  or more to any claimant having such an outstanding obligation, 
1126  the department or the manager shall transmit the amount of the 
1127  debt to the agency claiming the debt and shall authorize payment 
1128  of the balance to the prize winner after deduction of the debt. 
1129  If a prize winner owes multiple debts subject to offset under 
1130  this subsection and the prize is insufficient to cover all such 
1131  debts, the amount of the prize shall be transmitted first to the 
1132  agency claiming that past due child support is owed. If a 
1133  balance of lottery prize remains after payment of past due child 
1134  support, the remaining lottery prize amount shall be transmitted 
1135  to other agencies claiming debts owed to the state, pro rata, 
1136  based upon the ratio of the individual debt to the remaining 
1137  debt owed to the state. 
1138         Section 15. Section 24.1153, Florida Statutes, is amended 
1139  to read: 
1140         24.1153 Assignment of prizes payable in installments.— 
1141         (1) The right of any person to receive payments under a 
1142  prize that is paid in installments over time by the department 
1143  or the manager, if a management agreement is in force, may be 
1144  voluntarily assigned, in whole or in part, if the assignment is 
1145  made to a person or entity designated pursuant to an order of a 
1146  court of competent jurisdiction located in the judicial district 
1147  where the assigning prize winner resides or where the 
1148  headquarters of the department is located or where in the state 
1149  the headquarters of the manager is located, if a management 
1150  agreement is in force. A court may issue an order approving a 
1151  voluntary assignment and directing the department or the manager 
1152  to make prize payments in whole or in part to the designated 
1153  assignee, if the court finds that all of the following 
1154  conditions have been met: 
1155         (a) The assignment is in writing, is executed by the 
1156  assignor, and is, by its terms, subject to the laws of this 
1157  state. 
1158         (b) The purchase price being paid for the payments being 
1159  assigned represents a present value of the payments being 
1160  assigned, discounted at an annual rate that does not exceed the 
1161  state’s usury limit for loans. 
1162         (c) The assignor provides a sworn affidavit attesting that 
1163  he or she: 
1164         1. Is of sound mind, is in full command of his or her 
1165  faculties, and is not acting under duress; 
1166         2. Has been advised regarding the assignment by his or her 
1167  own independent legal counsel, who is unrelated to and is not 
1168  being compensated by the assignee or any of the assignee’s 
1169  affiliates, and has received independent financial or tax advice 
1170  concerning the effects of the assignment from a lawyer or other 
1171  professional who is unrelated to and is not being compensated by 
1172  the assignee or any of the assignee’s affiliates; 
1173         3. Understands that he or she will not receive the prize 
1174  payments or portions thereof for the years assigned; 
1175         4. Understands and agrees that with regard to the assigned 
1176  payments the department or the manager and its officials and 
1177  employees will have no further liability or responsibility to 
1178  make the assigned payments to him or her; 
1179         5. Has been provided with a one-page written disclosure 
1180  statement setting forth, in bold type of not less than 14 
1181  points, the payments being assigned, by amounts and payment 
1182  dates; the purchase price being paid; the rate of discount to 
1183  present value, assuming daily compounding and funding on the 
1184  contract date; and the amount, if any, of any origination or 
1185  closing fees that will be charged to him or her; and 
1186         6. Was advised in writing, at the time he or she signed the 
1187  assignment contract, that he or she had the right to cancel the 
1188  contract, without any further obligation, within 3 business days 
1189  following the date on which the contract was signed. 
1190         (d) Written notice of the proposed assignment and any court 
1191  hearing concerning the proposed assignment is provided to the 
1192  department’s or the manager’s counsel at least 10 days prior to 
1193  any court hearing. The department or the manager is not required 
1194  to appear in or be named as a party to any such action seeking 
1195  judicial confirmation of an assignment under this section, but 
1196  may intervene as of right in any such proceeding. 
1197         (2) A certified copy of a court order approving a voluntary 
1198  assignment must be provided to the department or the manager no 
1199  later than 14 days before the date on which the payment is to be 
1200  made. 
1201         (3) In accordance with the provisions of s. 24.115(4), a 
1202  voluntary assignment may not include or cover payments or 
1203  portions of payments that are subject to offset on account of a 
1204  defaulted or delinquent child support obligation or on account 
1205  of a debt owed to a state agency. Each court order issued under 
1206  subsection (1) shall provide that any delinquent child support 
1207  obligations of the assigning prize winner and any debts owed to 
1208  a state agency by the assigning prize winner, as of the date of 
1209  the court order, shall be offset by the department or the 
1210  manager first against remaining payments or portions thereof due 
1211  the prize winner and then against payments due the assignee. 
1212         (4) The department or the manager, and its respective 
1213  officials and employees, shall be discharged of all liability 
1214  upon payment of an assigned prize under this section. 
1215         (5) The department or the manager may establish a 
1216  reasonable fee to defray any administrative expenses associated 
1217  with assignments made under this section, including the cost to 
1218  the department or the manager of any processing fee that may be 
1219  imposed by a private annuity provider. The fee amount shall 
1220  reflect the direct and indirect costs associated with processing 
1221  such assignments. 
1222         (6) If at any time the Internal Revenue Service or a court 
1223  of competent jurisdiction issues a determination letter, revenue 
1224  ruling, other public ruling of the Internal Revenue Service, or 
1225  published decision to any state lottery or prize winner of any 
1226  state lottery declaring that the voluntary assignment of prizes 
1227  will affect the federal income tax treatment of prize winners 
1228  who do not assign their prizes, the secretary of the department 
1229  shall immediately file a copy of that letter, ruling, or 
1230  published decision with the Secretary of State and the Office of 
1231  the State Courts Administrator. A court may not issue an order 
1232  authorizing a voluntary assignment under this section after the 
1233  date any such ruling, letter, or published decision is filed. 
1234         Section 16. Section 24.117, Florida Statutes, is amended to 
1235  read: 
1236         24.117 Unlawful sale of lottery tickets; penalty.—Any 
1237  person who knowingly: 
1238         (1) Sells a state lottery ticket when not authorized by the 
1239  department or this chapter act to engage in such sale; 
1240         (2) Sells a state lottery ticket to a minor; or 
1241         (3) Sells a state lottery ticket at any price other than 
1242  that established by the department; 
1243 
1244  commits is guilty of a misdemeanor of the first degree, 
1245  punishable as provided in s. 775.082 or s. 775.083. 
1246         Section 17. Subsections (4) and (5) of section 24.118, 
1247  Florida Statutes, are amended to read: 
1248         24.118 Other prohibited acts; penalties.— 
1249         (4) BREACH OF CONFIDENTIALITY.—Any person who, with intent 
1250  to defraud or with intent to provide a financial or other 
1251  advantage to himself, herself, or another, knowingly and 
1252  willfully discloses any information relating to the lottery 
1253  designated as confidential and exempt from the provisions of s. 
1254  119.07(1) pursuant to this chapter commits act is guilty of a 
1255  felony of the first degree, punishable as provided in s. 
1256  775.082, s. 775.083, or s. 775.084. 
1257         (5) UNLAWFUL REPRESENTATION.— 
1258         (a) Any person who uses point-of-sale materials issued by 
1259  the department or the manager or otherwise holds himself or 
1260  herself out as a retailer without being authorized by the 
1261  department or the manager to act as a retailer commits is guilty 
1262  of a misdemeanor of the first degree, punishable as provided in 
1263  s. 775.082 or s. 775.083. 
1264         (b) Any person who without being authorized by the 
1265  department or the manager in writing uses the term “Florida 
1266  Lottery,” “State Lottery,” “Florida State Lottery,” or any 
1267  similar term in the title or name of any charitable or 
1268  commercial enterprise, product, or service commits is guilty of 
1269  a misdemeanor of the first degree, punishable as provided in s. 
1270  775.082 or s. 775.083. 
1271         Section 18. Subsections (1) and (2) of section 24.120, 
1272  Florida Statutes, are amended to read: 
1273         24.120 Financial matters; Operating Trust Fund; interagency 
1274  cooperation.— 
1275         (1) There is hereby created in the State Treasury an 
1276  Operating Trust Fund to be administered in accordance with 
1277  chapters 215 and 216 by the department. All money received by 
1278  the department which remains after payment of prizes and initial 
1279  compensation paid to retailers shall be deposited into the 
1280  Operating Trust Fund. All moneys in the trust fund are 
1281  appropriated to the department for the purposes specified in 
1282  this chapter act. 
1283         (2) Moneys available for the payment of prizes awarded by 
1284  the department, on a deferred basis shall be invested by the 
1285  State Board of Administration in accordance with a trust 
1286  agreement approved by the secretary and entered into between the 
1287  department and the State Board of Administration in accordance 
1288  with ss. 215.44-215.53. The investments authorized by this 
1289  subsection shall be done in a manner designed to preserve 
1290  capital and to ensure the integrity of the lottery disbursement 
1291  system by eliminating the risk of payment of funds when due and 
1292  to produce equal annual sums of money over the required term of 
1293  the investments. 
1294         Section 19. Subsections (1), (2), and (3) of section 
1295  24.121, Florida Statutes, are amended to read: 
1296         24.121 Allocation of revenues and expenditure of funds for 
1297  public education.— 
1298         (1) Variable percentages of the gross revenue from the sale 
1299  of online and instant lottery tickets shall be returned to the 
1300  public in the form of prizes paid by the department or retailers 
1301  as authorized by this chapter act. The variable percentages of 
1302  gross revenue from the sale of online and instant lottery 
1303  tickets returned to the public in the form of prizes shall be 
1304  established by the department in a manner designed to maximize 
1305  the amount of funds deposited under subsection (2). 
1306         (2) Each fiscal year, variable percentages of the gross 
1307  revenue from the sale of online and instant lottery tickets as 
1308  determined by the department consistent with subsection (1), and 
1309  other earned revenue up to the amount of the state annuity 
1310  requirement, excluding application processing fees, shall be 
1311  deposited in the Educational Enhancement Trust Fund, which is 
1312  hereby created in the State Treasury to be administered by the 
1313  Department of Education. If the department enters into a 
1314  management agreement, the proceeds received by the department 
1315  from the management agreement under s. 24.1115(7)(b) and (c) 
1316  shall be deposited in the Educational Enhancement Trust Fund, 
1317  with, at minimum, the greater of $400 million or one-third of 
1318  the funds deposited into the trust fund to be allocated to the 
1319  Florida Bright Futures Scholarship Program. The Department of 
1320  the Lottery shall transfer moneys to the Educational Enhancement 
1321  Trust Fund at least once each quarter. Funds in the Educational 
1322  Enhancement Trust Fund shall be used to the benefit of public 
1323  education in accordance with the provisions of this chapter act. 
1324  Notwithstanding any other provision of law, lottery revenues 
1325  transferred to the Educational Enhancement Trust Fund shall be 
1326  reserved as needed and used to meet the requirements of the 
1327  documents authorizing the bonds issued by the state pursuant to 
1328  s. 1013.68, s. 1013.70, or s. 1013.737 or distributed to school 
1329  districts for the Classrooms First Program as provided in s. 
1330  1013.68. Such lottery revenues are hereby pledged to the payment 
1331  of debt service on bonds issued by the state pursuant to s. 
1332  1013.68, s. 1013.70, or s. 1013.737. Debt service payable on 
1333  bonds issued by the state pursuant to s. 1013.68, s. 1013.70, or 
1334  s. 1013.737 shall be payable from, and is secured by a first 
1335  lien on, the first lottery revenues transferred to the 
1336  Educational Enhancement Trust Fund in each fiscal year. Amounts 
1337  distributable to school districts that request the issuance of 
1338  bonds pursuant to s. 1013.68(3) are hereby pledged to such bonds 
1339  pursuant to s. 11(d), Art. VII of the State Constitution. 
1340         (3) The funds remaining in the Operating Trust Fund after 
1341  transfers to the Educational Enhancement Trust Fund shall be 
1342  used for the payment of administrative expenses of the 
1343  department. These expenses shall include all costs incurred in 
1344  the department’s direct operation and administration of the 
1345  lottery or the management agreement and all costs resulting from 
1346  any contracts entered into for the purchase or lease of goods or 
1347  services required by the lottery, including, but not limited to: 
1348         (a) The compensation paid to retailers; 
1349         (b) The costs of supplies, materials, tickets, independent 
1350  audit services, independent studies, data transmission, 
1351  advertising, promotion, incentives, public relations, 
1352  communications, security, bonding for retailers, printing, 
1353  distribution of tickets, and reimbursing other governmental 
1354  entities for services provided to the lottery; and 
1355         (c) The costs of any other goods and services necessary for 
1356  effectuating the purposes of this chapter act. 
1357         Section 20. Section 24.122, Florida Statutes, is amended to 
1358  read: 
1359         24.122 Exemption from taxation; state preemption; 
1360  inapplicability of other laws.— 
1361         (1) This chapter act shall not be construed to authorize 
1362  any lottery except the lottery operated by the department or the 
1363  manager under pursuant to this chapter act. 
1364         (2) No state or local tax shall be imposed upon any prize 
1365  paid or payable under this chapter act or upon the sale of any 
1366  lottery ticket pursuant to this chapter act. 
1367         (3) All matters relating to the operation of the state 
1368  lottery are preempted to the state, and no county, municipality, 
1369  or other political subdivision of the state shall enact any 
1370  ordinance relating to the operation of the lottery authorized by 
1371  this chapter act. However, this subsection shall not prohibit a 
1372  political subdivision of the state from requiring a retailer to 
1373  obtain an occupational license for any business unrelated to the 
1374  sale of lottery tickets. 
1375         (4) Any state or local law providing any penalty, 
1376  disability, restriction, or prohibition for the possession, 
1377  manufacture, transportation, distribution, advertising, or sale 
1378  of any lottery ticket, including chapter 849, shall not apply to 
1379  the tickets of the state lottery operated pursuant to this 
1380  chapter act; nor shall any such law apply to the possession of a 
1381  ticket issued by any other government-operated lottery. In 
1382  addition, activities of the department under this chapter act 
1383  are exempt from the provisions of: 
1384         (a) Chapter 616, relating to public fairs and expositions. 
1385         (b) Chapter 946, relating to correctional work programs. 
1386         (c) Chapter 282, relating to communications and data 
1387  processing. 
1388         (d) Section 110.131, relating to other personal services. 
1389         Section 21. Section 24.123, Florida Statutes, is amended to 
1390  read: 
1391         24.123 Annual audit of financial records and reports.— 
1392         (1) The Legislative Auditing Committee shall contract with 
1393  a certified public accountant licensed pursuant to chapter 473 
1394  for an annual financial audit of the department. The certified 
1395  public accountant shall have no financial interest in any vendor 
1396  or manager with whom the department is under contract. The 
1397  certified public accountant shall present an audit report no 
1398  later than 7 months after the end of the fiscal year and shall 
1399  make recommendations to enhance the earning capability of the 
1400  state lottery or the management agreement and to improve the 
1401  efficiency of department operations. The certified public 
1402  accountant shall also perform a study and evaluation of internal 
1403  accounting controls and shall express an opinion on those 
1404  controls in effect during the audit period. The cost of the 
1405  annual financial audit shall be paid by the department. 
1406         (2) The Auditor General may at any time conduct an audit of 
1407  any phase of the operations of the state lottery or the 
1408  management agreement and shall receive a copy of the yearly 
1409  independent financial audit and any security report prepared 
1410  pursuant to s. 24.108. 
1411         (3) A copy of any audit performed pursuant to this section 
1412  shall be submitted to the secretary, the Governor, the President 
1413  of the Senate, the Speaker of the House of Representatives, and 
1414  members of the Legislative Auditing Committee. 
1415         Section 22. Subsection (1) of section 24.124, Florida 
1416  Statutes, is amended to read: 
1417         24.124 Responsibility for ticket accuracy; department, 
1418  retailer, and vendor liability.— 
1419         (1) Purchasers of online games tickets shall be responsible 
1420  for verifying the accuracy of their tickets, including the 
1421  number or numbers printed on the tickets. In the event of an 
1422  error, the ticket may be canceled and a replacement ticket 
1423  issued pursuant to rules adopted promulgated by the department 
1424  of the Lottery. 
1425         Section 23. This act shall take effect January 1, 2011.